Hungarian veto risks unraveling EU sanctions on Russian assets
Estonia warns about the consequences that may arise from the potential lifting of EU sanctions on frozen Russian assets. A Hungarian veto on this issue threatens to shift the responsibility for multi-billion-dollar loans to other G7 and EU countries, reports the Financial Times.
Russia is attempting to find a way to reclaim frozen assets that were used as collateral for loans granted to Ukraine by the European Union and the G7 group. These assets, valued at $223 (CAD 309) billion, are crucial for maintaining financial support for Kyiv.
According to the Financial Times, forecasts indicate that if Hungary, led by Viktor Orbán, blocks the extension of EU sanctions, there is a serious risk that the G7 and the EU will have to take responsibility for the loans secured by Russian assets.
The Estonian Minister of Foreign Affairs, Margus Tsahkna, warns that "if they are going to block it, then the sanctions will be down. And the central bank assets will be delivered to Russia, to [Vladimir] Putin, as an award. We cannot let it happen." This stance arises from concerns over the lack of unanimity among EU member states, as a decision on this matter requires unanimity, and Hungary's position could pose a serious threat, notes the Financial Times.
Belgium: Confiscation is not an option
Despite these concerns, Belgium – where most of the frozen assets are stored – opposes the idea of confiscation, fearing the violation of international law and potential harm to the euro's reputation.
Belgian Budget Minister Vincent Van Peteghem said that European position has not changed, suggesting that confiscation is not an option at the moment due to all the risks associated with it. He also added that it's better to use these frozen assets as leverage during peace negotiations with Russia.
Estonia agrees with Belgium's concerns, but Tsahkna emphasizes that the decision on the future of these assets should be made jointly by a group of countries. "We definitely understand that they cannot be left alone in that very complicated situation," said Tsahkna. Regarding Hungary, Tsahkna noted that "they have many problems with their economy" and suggested that negotiations with Budapest must continue, as reported.
However, Russia is not giving up on efforts to access these frozen resources. Ukrainian officials warn that Russia has attempted to sell some of these assets to investors who could recover them once they are unfrozen.
Of course Russia would like to use their frozen assets to bargain and make deals. But the fact is that they don’t have these assets, they are frozen in Europe, emphasized the Estonian minister.
Final decisions regarding the future of sanctions and frozen assets may depend on the outcomes of peace negotiations conducted by the US. Tsahkna emphasizes that "evven President Trump has said in theory that he gives the time up to the end of April and then he will act." These negotiations will be crucial for the future of sanctions and continued support for Ukraine.
